The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, OCTOBER 4, 1930. THE AUSTRALIAN RAILWAYS.

Hokitika Guardian, 4 October 1930, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, OCTOBER 4, 1930. THE AUSTRALIAN RAILWAYS.

The applications made to the Arbitration Court by the Railway Commissioners of Victor ill, New South Wales, South Australia'.and Tasmania for the setting aside of railway awards, emphasises in no hncertain manners, says a Duuodin paper, the dire financial strait sinto which the Australian rail transport services have fallen. The Commissioners have requested that the' action shall /be prompt, as otherwise the whole of the railway systems of the eastern iStates may 'be forced to suspend operations before the end of the year. The union representatives designate this statement as alarmist, and possibly it is in that a complete l cassation or railway activities in four of the Australian States is almost nil thinkable, At the same time such A request, coming from men who are intimately concerned in transport matters, must be regarded as haying a purpose, That purpose is probably the forcing] upon the understanding of those who cannot or will riot' comprehend the warnings of Sir Otto Niemeyer the seriousness (nf tilie position 'in the Commonwealth in regard to railway finances. Briefly stated, the problem which has to be faced by the railways of Australia is the meeting of an interest bill which cannot "o© met under present conditions. During the lnpt five years the aggregate deficits on Australian railways have amounted to some four millions a year. In the last financial year a profit on working of £10,300,000 was. shown, but there were interest charges amounting to £T4,70.T000 to be met, and consequently after tins was deducted the net doss on the year’s operations was £4,400,000. It is unnecessary to remark that there is no prospect of the railways doing better during the present year, while it may fairly safely be assumed that they will do worse if some adjustment on the lines suggested by the Railway Commissioners is not allowed. The causes of this formidable problem are many, but the main causes are not far to seek. An economist of the University of Tasmania, reviewing the problem in a current journal, regards these as political. Political influence ha.s 'been responsible for the construction of costly, non-paying lines, and hw been felt in other ways. Tli© Royal Commission which reported on the Victorian railways recently showed, for example, that the Minister had on occasion imposed his own views on the Railway Commissioners with, it was alleged, detriment to railway finances. This is a difficulty aim ms t inevitable when industrial undertakings are under political; or semi-political, management. Experience in New Zealand lias proved the huge losses that may he occasioned throu,eh the construction of “developmental” lines. Political influence is shown to have acted in another wav also, by preventing due writing down of capital value, on railway undertakings. When a deficit has appeared unavoidable on a railway system, or the surplus lias been insufficiently impressive, there lias been one method of covering up the position—failure to take into account depreciation charges. Thus the nominal capital value of the Australian railways is £319.000,000. but economists estimate that some £81,500,000 of this amount represents dead-weight debt which has never been writf'en. off. So far, the necessity for a writing down of capital has not been recognised, in

Australia except in the ease of New iSoutli Wales. It is, of course, necessary to -realise that the mere writing down of capital value does not remove the obligation to pay interest charges on the amount tin's lost, but it- would certainly enable the actual -position of the railways to be intimated, and that is practically 'impossible at present. The fact which the Railway Commissioners are lacing, and railway workers will have to face, is that none of the railway systems in -Australia is paying, in the sense of returning interest on the capital represented in its lines, plant- and equipment. So serious i,s the state of affairs that the chairman of the Victorian Railway Commissioners stated recently that the Government did not know how to meet its payroll. Tills implies a confession of virtual bankruptcy and suggests that the statement that the railways may have to ceape operations shortly, failing relief through the Arbitration Court, is fa-r from being alarmist in the sense of being unnecessarily alarming, but is, in fact, a wellweighed commentary on the position. It is possible to sympathise with the railway employees, who are naturally opposed to the suspension of awards, but it is difficult to see in what other way the Australian railways will be enabled to carry on. These workers have at least the poor consolation of knowing that the railways are not the only Australian enterprises which must gain relief by drastic measures